Mortgage rates in Spain

Spanish mortgage rates depend on a variety of variables, of which the most popular is a floating variable based on the European Central Bank Rate (EURIBOR). When getting a mortgage, you’re advised to compare Euribor rates, but things become tricky since there are various Euribor rates that include a daily, weekly, monthly, three-monthly, six-monthly and 12-monthly quote. You need to know which one is being quoted in order to compare terms. The most common – and highest – is the 12-monthly rate. Lenders take this Euribor rate and add their own margin, so if the Euribor is 1.25% and your lender adds 2.5%, your Spanish mortgage rate will peg a total of 3.75%.

Value of mortgage rates in Spain

Mortgage rates in Spain are cheaper than in most parts of Europe, with rates and terms that vary from inflexible and expensive mortgages to cheaper and flexible ones. In fact, since lenders often set their own prices, you’ll find considerable difference in terms. Generally, Spanish banks offer a non-resident up to 70% of the bank’s valuation of the property, while a resident or national purchaser may land up to 100% of of the valuation (when purchasing repossessed stock from a bank). Find out more on Mortgage rates in Spain below.

Variable and fixed rate mortgages in Spain

A variable mortgage package means that its interest rates will vary since they are set by the fluctuating terms of the Euribor. When interest dips, your monthly repayment is lower. On the other hand, when the Euribor rises, your month’s interest rate does, too.

For that reason, most prefer the fixed rate mortgage, which tends to tends to a have an initial higher interest rate, but, on the other hand is predictable. This may make it cheaper in the long run. Some lenders also offer a mixed mortgage that involves some years of fixed interest payments followed by a floating rate thereafter.

Costs of getting a Spanish mortgage.

Typical closing costs include the transfer and stamp taxes, the bank’s arrangement fee and opening fee, a notary fee and registry fee, and the bank assessor’s fee. Property transfers in Spain are done through a notary, after which the buyer pays the following taxes:

• The transfer tax – 6–10 percent of the purchase price, depending on the property’s location.
• The stamp tax – 0.75–1.5 percent of the purchase price and varies on location
• The seller’s plusvlia tax – which sometimes the buyer pays.It varies based on the seller’s tenure in the transferred property.

You’ll also need to buy home insurance to cover the value of the property.